WASHINGTON, D.C. -

In another sign repossession volumes could be softening, the American Bankers Association discovered that consumer delinquencies fell in all 11 loan categories the association tracks — including auto loans.

According to the fourth quarter Consumer Credit Delinquency Bulletin, the composite ratio — which tracks delinquencies in eight closed-end installment loan categories — fell 10 basis points to 2.49 percent of all accounts in the fourth quarter, the lowest it has been since 2008. 

ABA indicated that direct auto loan delinquencies fell from 1.15 percent to 1.06 percent, while indirect auto loan delinquencies dipped from 2.60 percent to 2.47 percent. 

The association noted that bank card delinquencies continued to improve, falling eight basis points to 3.l7 percent of all accounts in the fourth quarter, the lowest since 2001. 

The ABA report defines a delinquency as a late payment that is 30 days or more overdue.

Overall, ABA chief economist James Chessen said the news was encouraging.

“You can’t get a better consumer credit report card than this,” Chessen declared.

“It’s very rare that delinquencies improve in every single loan category. The last time that happened was in the fourth quarter of 2004,” he added.

 However, Chessen thinks the delinquency rate on the composite ratio is still too high.

“Even with a strong quarter, there’s still room for improvement in delinquencies,” Chessen stressed.

“Troublesome performance in housing-related loans is keeping overall delinquency rates elevated. The housing sector continues its painful adjustment, and it will take a long time before delinquency rates return to normal,” he went on to say.

ABA suggested that home equity loan delinquencies appear to be the most stubborn, falling just 4 basis points to 4.08 percent of all accounts in the fourth quarter. 

The association added that property improvement loan delinquencies fell 3 basis points to 0.93 percent of all accounts and home equity lines of credit delinquencies dropped 24 basis points to 1.69 percent of all accounts. 

But Chessen believes consumers have reason to feel positive.

“The economic tide at the end of 2011 lifted most boats.  The deleveraging of consumer credit is paying dividends now.  Consumers are being careful about taking on new debt; they’re managing the debt they do have much better and the amount of debt as a portion of income is going down,” Chessen said. 

“The biggest concern I have now is retail gas prices,” Chessen noted while average gas prices have risen 71 cents per gallon since tensions increased in the Middle East over Iran’s nuclear program in mid-December.

“That’s $70 billion that could have gone towards other kinds of spending or to pay down debt,” he projected.

Looking forward, Chessen expects delinquency rates to improve but says they are unlikely to repeat this quarter’s unusual rate of improvement. 

“The good news is that fewer people are losing their jobs and more people are becoming re-employed. Those two factors combined means more people are better positioned to meet their debt obligations,” Chessen explained.

ABA reiterated the fourth quarter composite ratio is made up of the following eight closed-end loans.  All figures are seasonally adjusted based upon the number of accounts.

Beyond auto loans, the other closed-end loans ABA tracks include:

—Personal loan delinquencies fell from 3.00 percent to 2.87 percent.
—Mobile home delinquencies fell from 4.08 percent to 3.76 percent.
—RV loan delinquencies fell from 1.38 percent to 1.31percent.
—Marine loan delinquencies fell from 1.72 percent to 1.57 percent.
—Property improvement loan delinquencies fell from 0.96 percent to 0.93 percent.
—Home equity loan delinquencies  fell from 4.12 percent to 4.08 percent.

In addition, ABA tracks three open-end loan categories:

—Home equity lines of credit delinquencies fell from 1.93 percent to 1.69 percent.
—Non-card revolving loan delinquencies fell from 1.43 percent to 1.40 percent.
—Bank card delinquencies fell from 3.25 percent to 3.17 percent.

Chessen also discussed the latest report in the video posted below.